Brain injuries present unique circumstances because of their nature, with many claims being high value.
Even a claimant who retains capacity may nevertheless be highly vulnerable, especially if he has limited financial knowledge and there can be major stress from the receipt of a personal injury award, which can often exceed £1 million.
Loss of benefits due to a large brain injury compensation award
Such a claimant may also be in receipt of DWP benefits, some of which may be means tested, so the first priority is to protect these, as means tested benefits would be lost if an award exceeded £16,000.
A trust to protect means tested benefits
The solicitor is therefore duty bound to bear in mind the protection of such benefits by the use of an appropriate trust, which can be:
- A bare trust, in which the claimant only is the beneficiary and which ends on his death and passes by his Will or
- A wider form of discretionary trust, including not only the claimant as principal during his lifetime, but other beneficiaries, possibly a wife or other family of the claimant. Such a trust will not terminate on the death of the claimant, but will continue for the protection of the other beneficiaries and because it is irrevocable, unless the Trustees decide to end it, ongoing protection of the family is guaranteed. Contrast this with the bare trust above, which ends on the death of the claimant, especially if the claimant’s Will does not provide the same protection or has been influenced by the opinions of others.
‘Letter of Wishes’ for a trust
There will also be what is called the ‘letter of wishes’ placed with the wider discretionary trust guiding the Trustees on what is to happen following the death of the claimant.
When should finances be assessed in a brain injury claim?
It is important that the full personal and financial circumstances of the claimant are taken into account at the earliest possible stage of the claim, when the instructing solicitor is in a position to advise upon the likely size of the award.
Post-settlement protection as part of a brain injury claim
Many solicitors’ practices are very successful in achieving a good result for a claimant but this should be regarded only as the first stage because post-settlement protection, usually though a trust, is equally important if the award once received, is not to be lost or frittered away by bad family circumstances or poor financial advice.
Any trust created will require Trustees, at least two, who can be personal friends or family members. Professionals can also be appointed.
Can a trust be revoked/cancelled?
If the deed is a bare trust, it is revocable by the claimant provided he retains capacity, for example if the purpose of the trust becomes redundant.
If it is the wider discretionary trust, there may well be ongoing family circumstances requiring protection, so for this reason such a trust is irrevocable on the part of the claimant but the Trustees have power to end it if they feel it is appropriate to do so.
It’s important to ensure at any firm instructed that the personal injury department works closely with the private client, trust and investment departments to provide an overall, complete service to claimants both pre- and post-settlement.
What is the Brain Injury Group?
The Brain Injury Group exists to support individuals and families affected by brain injury and the health and social care professionals working in this specialist field. Our mission is to provide anyone affected by brain injury with access to advice on legal, financial and welfare benefit issues delivered by proven experts in the field who have been chosen not only for their skills and knowledge, but also for their passion and dedication to helping people.
How can Brain Injury Group help you?
If you would like advice about bringing a personal injury claim, capacity, deputyships or managing the award of compensation, we have specialist brain injury solicitors and Court of Protection solicitors who can assist.
You can find full details of Brain Injury Group members on our website or there are several ways to get in touch:
- Call us on 0800 612 9660 or 01737 852203
- Email us at [email protected]
- Complete this short enquiry form and we’ll get back to you
Produced with the assistance of Paul Fretwell, Partner at George Ide
Paul is a partner and head of personal injury at Brain Injury Group member firm, George Ide who have offices in Chichester, Guildford and London. Paul is a member of the Law Society Personal Injury Panel and is an APIL accredited brain injury specialist.
George Ide are one of the UK’s leading brain injury claims law firms. For more information about George Ide, see the Brain Injury Group George Ide profile.